InterContinental Hotels Group (IHG), the owner of Holiday Inn, has reported that strong demand from the World Cup across the Americas helped offset the negative impact of the Iran war on its Middle Eastern business.
Revenue per available room (RevPAR), a key performance metric for hotel groups, rose by 4.8% in the Americas during the half-year, with a 5.4% increase in the second quarter. This growth was driven by strong performance in World Cup football match locations, which contributed about 1% to growth.
Half-year results
The group's half-year revenues and earnings rose despite the conflict affecting trading across the region and some wider international travel since it began on February 28. Revenues increased by 6% on an underlying basis to 1.26 billion US dollars (£930 million) for the six months to June 30, while operating profits rose 10% to 665 million dollars (£492.4 million). However, on a statutory basis, pre-tax profits fell 9% to 578 million dollars (£428 million).
Globally, RevPAR rose 4.1% in the first half, but growth slowed to 3.5% in the second quarter from 4.4% in the first three months, as the Middle East conflict took its toll. In the Middle East, which accounts for 5% of IHG's system size globally, RevPAR slumped by nearly a fifth, down 19% in the second quarter, following a 2% drop in the previous three months.
CEO statement
Elie Maalouf, chief executive of IHG Hotels & Resorts, said: “While there are ongoing impacts from the Middle East conflict, including some wider disruption to international travel flows, we continue to expect these to be fully offset by growth in demand elsewhere.”
Regional performance
In the UK, IHG's third largest market with 378 hotels, RevPAR rose 3.1% in the second quarter. Continental Europe saw 2.3% growth, while Asia Pacific recorded 6% growth. Greater China saw first half growth of 3.1%, with the first quarter boosted by Chinese New Year celebration bookings.
